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RHJ Investor

RHJ Investor is the department of Rental Housing Journal that speaks specifically to the interests and needs of real estate investors and apartment owners. Whether you're part or a REIT (real estate investment trust) , independently own large apartment communities, are a small landlord with 1 or 2 rental homes or choose to fix and flip, RHJ Investor is a great source for information. This site features how-tos and best practices for buying and selling property, real estate taxes, choosing property management and maintenance vendors, 1031 excahnges & TICs, apartment financing, budgeting and much more.

Prepayment Penalty Choices In The Era of Rising Interest Rates

By Eli Glanz, President, Alpha American Capital

Most commercial mortgages, particularly fixed-rate mortgages, have some sort of prepayment penalty. Lenders impose such a penalty to earn back some, or all, of the interest income they would have earned had the mortgage remained outstanding for its entire term.

Prepayment penalties generally come in one of three flavors: defeasance, yield maintenance or a percentage fee. For those of us who focus on financing multifamily properties, the last two options are what we will encounter most often as those are the options offered by the agencies (Freddie Mac and Fannie Mae).

Homes flipped in 2016 sold for a median price of $189,900, a gross flipping profit of $62,624 above the median purchase price of $127,276 and representing a gross flipping return on investment (ROI) of 49.2 percent. Both the gross flipping dollar amount and ROI were the highest going back to 2000, the earliest home flipping data is available for the report, according to the release.

“Investors in search of flipping returns are increasingly willing to move to secondary and tertiary housing markets and neighborhoods with older, smaller properties that are available at a deeper discount,” Daren Blomquist, senior vice president at ATTOM Data Solutions, said in the release.

Veteran real estate owner and investor Larry Arth has a great property manager who he has worked with for years. Other owners and investors struggle at times to find the right management style themselves to work with a property manager. Here are some thoughts on how to make the relationship between owner and investors and property managers work better.

By Larry Arth

I was having a conversation recently with an investor who owned a rental property free and clear and had been happy for years that all things were going well, with tenants paying regularly and checks coming in on time.

For the past five years, this investor was collecting rent checks from the property management company like clockwork. The property management company had been sold to another owner a few years back, but things were still going well. The checks came in right on time every month.

Just what an investor wants from a good property management company, right?

A company, headed by the former co-founder of RealtyShares, has launched a platform it says will build, manage, and rebalance a portfolio of 75 to 100 real estate loans for investors using crowdfunding to make it easier to invest in real estate, according to a release.

The Informed Investor – Utilizing Exchanges

Roger W. Bowlin | Real Estate Transition Solutions, LLC

Savvy real estate investors know that 1031 exchanges are a tool unlike any other for maximizing their investment real estate holdings. 1031 exchanges can be applied in numerous ways to facilitate portfolio growth, cash flow, diversification, estate planning or many other objectives investors pursue. Every investor should be familiar with exchange mechanics, considerations and replacement options.

Throughout the following six issues of OnSite, we will provide key educational articles for owners focusing on

The Best Real Estate Investment Opportunities in 2017

The company has identified the best metros for real estate investing, and provides an in-depth analysis of the U.S. investment housing sector

HomeUnion, an online real estate investment management firm, has released its 2017 National Single-Family Rental Research (SFR) Report. The comprehensive study ranks 31 metro areas based on several factors, including investment opportunities for 2017, yields, rental demand, investment home prices and capital markets conditions. Atlanta topped the Opportunity Rankings list as the metro area offering the best real estate investment opportunities in 2017, followed closely by Orlando and Seattle.

Pockets of Affordable Housing Exist Within the Most Expensive Markets

Even in metros where homebuyers have the biggest mortgage burdens, some cities within those metros provide relatively affordable housing options.

The San Jose metro has been one of the hottest housing markets in the country. Homebuyers in Palo Alto can expect to spend 75 percent of their income on a house paymenti. But just 15 miles away, buyers in Milpitas, Calif. need only spend 35 percent.

This example of disparity in the Silicon Valley demonstrates how hot housing markets are fueled by cities where high demand for jobs and amenities drive housing values to far outpace incomes. The phenomenon is one reason there is more inequality in very expensive markets.

John Burns Real Estate consulting this week reviews their housing investment forecasts from January of last year to see how they did in forecasting multifamily and single-family construction and growth in 2016.

With a lot of insight from our clients and survey participants who build and finance a large percentage of the homes built every year, we had a good year forecasting.

Our clients make multi-million, sometimes billion-dollar business decisions and housing investment—often relying on our forecasts for guidance. We take these forecasts very seriously and hold ourselves accountable against actual results, right or wrong. With 2016 now in the books, here is how our January 2016 forecast fared: